The stock market will be closed on Monday, February 20, 2023, in observance of President’s Day.
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What Is the Holiday Effect?
Understanding how the stock market might be affected by the holiday season will help you invest well and beat the markets. Investors sometimes refer to a pre-holiday market aberration as the “holiday impact.” This is because the penultimate trading day before a scheduled long weekend or holiday is when a stock market typically surges.
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The holiday impact is linked to investors’ general optimism and confidence. The fact that customers tend to spend more money around the holidays is another essential explanation for the market surge. The share prices of retailers, in particular, may increase as a result.
Many traders and market analysts take time off work during the holidays to relax from their regular trading and research schedules. Those investors view the holidays as a time to unwind and refresh. On the other hand, some traders see the season as a chance to work harder and get some tactical advantages in the market, maybe by taking advantage of the period when many other traders take holidays. Understanding the holiday impact will help you get through it, no matter what sort of investor you are.
President’s Day Holiday Effect on Stocks
Presidents’ Day is a federal holiday in the U.S. Presidents’ Day is popularly viewed as a day to celebrate all U.S. presidents, past and present.
The only holiday that displays stock market frailty on the days preceding and following is Presidents’ Day. Over the past 22 years, trading has been increasingly unfavorable. Historically, the Friday before this three-day break in the middle of winter is particularly terrible, but the following Tuesday following is typically not as bad, and has lately shown some improvement despite having higher average losses.
How does it look this year? This past Friday, stock indices finished today’s trading session mixed. The Dow Jones Industrial Average (DJIA) gained 0.39%, while the S&P 500 (SPX) and the Nasdaq 100 (NDX) fell 0.28% and 0.68%, respectively. The fluctuation is largely due to investor concern about inflation.
Watch this space to see what Tuesday, the day after the President’s Day holiday, brings. And remember to always use TipRanks to stay up-to-date on your stock research
